West Michigan ranked No. 3 in national survey of housing shortages

GRAND RAPIDS, MI - A recent study by Realtor.com looks at West Michigan's red-hot housing market from another angle -- the lack of available housing on the market.

The Grand Rapids metro area ranks third in the nation -- behind Seattle, Wash. and Eugene, Ore. -- in Realtor.com's latest look at housing shortages across the nation.

According to its findings, only 0.7 percent of the total housing inventory in Kent, Ottawa, Barry and Montcalm counties was on the market last December. That's comparing the 2,455 homes that were on the market to the total of 390,738 homes and apartments in the region.

The Grand Rapids market grew much tighter during 2016, according to the study. Those 2,455 houses on the market represent a 24.7 percent decline from December, 2015, when 3,237 homes were on the market.

Those two statistics nearly vaulted Grand Rapids to the top of the chart, according to Realtor.com, which noted West Michigan's economic growth is driving the demand for housing.

"Slowly and quietly, Grand Rapids has emerged from the stereotype of a derelict Rust Belt city," the study's authors noted in a press release. "Since late 2010, the city has experienced net in-migration for the first time in a decade, creating way more housing demand.

"Twice in 2016, Grand Rapids even made it onto our monthly list of hottest markets. The median home price shot up by 23.7% that year, due to a lack of homes for sale."

The Detroit housing market also made the list at No. 7. According to the study, 1 percent of the region's housing stock was for sale at the end of 2016, a 25.7 percent drop from the end of 2015.

"Left for dead for decades now, Detroit's housing market is truly, finally turning around. Last year the city saw housing price spikes of 11 percent," the study's authors said. "In downtown neighborhoods, it's not uncommon to see $300,000 condos and an occasional $1 million loft.

"But don't get us wrong--Detroit is not the next San Francisco," the authors warned. "Lack of equity is what's keeping many homes off the market. In neighborhoods where home values have yet to recover, owners who bought at the peak now owe more than their property is worth, so they can't afford to sell."

"We've got really hot neighborhoods, but at the end of the day, it's still Detroit," said Realtor Nik Leible with Cooke Realty. "There are still issues that need to be solved. Right now, the changes are happening one neighborhood at a time."

Other housing markets that made the Top 10 list of tight housing markets included Buffalo, New York; Fort Wayne, Ind.; Sacramento, Calif.; Portland, Ore.; Santa Rosa, Calif. and Omaha, Neb.